- As per market conditions, DAX and Euro Stoxx 50 futures point to a modest rebound.
- However, FTSE 100 lags as falling oil prices pressure commodity stocks.
- JPMorgan sees weaker earnings support for Europe in H2 2026, according to Bloomberg.
European stocks are set for a mixed start on Wednesday after a sharp tech-led selloff dragged regional markets lower in the previous session.
Futures point to a modest rebound in Germany and across the euro area, while the UK market is expected to remain flat. However, JPMorgan Private Bank expects European stocks to face tougher conditions during the second half of the year.
DAX and Euro Stoxx 50 Point Higher
The Euro Stoxx 50 closed Tuesday at 6,230.55 after a 1.28% drop. September futures later recovered to around 6,261. This points to an opening near 6,255-6,270, or roughly 0.4% to 0.5% above the previous close.
Germany’s DAX also showed signs of recovery. After ending Tuesday around 24,900-24,940, September futures climbed to about 25,059. Current pricing suggests a gain of around 0.4% to 0.5%, making the DAX the strongest among the major European indices before the opening bell.
France’s CAC 40 closed at 8,340.71 after losing 0.71%. July futures traded around 8,348.6, indicating a small gain of roughly 0.1%. The FTSE 100 remained the weakest. The index finished Tuesday at 10,428.85, down 0.09%. September futures hovered near 10,427.8, pointing to a flat or slightly negative open.
Earlier futures readings had shown broader weakness, with Euro Stoxx 50 and DAX futures down 0.40% and FTSE futures lower by 0.20%. However, sentiment improved during overnight trading.
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Higher Interest Rates Return and Oil Prices
The European Central Bank raised interest rates by 25 basis points earlier this month, the first major central bank hike since 2023. The move came amid renewed inflation pressure linked to the Iran conflict.
Markets are also pricing another 25-basis-point ECB increase later this year, despite comments from ECB President Christine Lagarde aimed at easing concerns over inflation.
On the other hand, JPMorgan Private Bank expects European stocks to face tougher conditions during the second half of the year.
According to Nataliia Lipikhina, falling oil prices could remove one of the biggest supports for earnings growth. Brent crude dropped 8% last week after tensions in the Middle East eased, although prices remain more than 13% above levels seen before the Iran war.
The bank said the next phase of the rally depends on whether companies outside the energy sector can continue delivering profit growth.
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